US accuses Chinese screening tech firm Nuctech of passing passenger info to Beijing

The United States has been assiduously lobbying European countries to drop Chinese technology in their 5G networks for a while now. These efforts have borne fruit, at least partially, with many countries like the United Kingdom reviewing the decision to allow telecom gear manufactured by the likes of Huawei and ZTE. However, the latest frontier in the American fight against Chinese companies does not lie on the bleeding edge of technology.
According to a report by the Wall Street Journal, the National Security Council and other government agencies in the US are attempting to persuade EU nations like Germany, Italy, and Greece to ditch baggage screening systems from Nuctech, a Chinese state-run company, whose units are now ubiquitous in most airports across Europe.

Officials in Washington reckon that any connected device, such as the ones manufactured by Nuctech, could pass on sensitive passenger data like travel history and shipping manifests to Chinese spies via a backdoor in the screener technology.

The United States Transportation Security Administration banned Nuctech hardware from most airports in the country in 2014 following a review of the underlying technology used in the machines. The report is classified. Nuctech refuted the allegation, saying that there was no evidence of wrongdoing, and that the ban was a witch hunt on the part of a smear campaign against Chinese firms, undertaken taken in the same vein as the sanctions against Huawei.

The company said at the time that data emanating from its device in airports across the world “belong only to our customers” and “by no mean” are passed on to the Chinese government. It added that it did not engage in predatory pricing by undercutting rivals to win contracts at major transport hubs. To illustrate this point, it said that it did not have a dominant position in terms of market share vis-à-vis baggage and cargo screening gear.

In 2010, the EU found Nuctech guilty of dumping – a practice whereby a product is sold at throwaway prices to thwart competition and establish a monopoly in the market. The company then set up a factory in Europe to address concerns, but cheap labour in Poland meant that costs continued to be low.

The US State Department did not directly confirm its strategy to wean the global transportation network from its reliance on Nuctech, given that most airports are reassessing contracts in the wake of an unprecedented crisis in the sector. American agencies, however, did say that they were proactively asking allies to guard against companies “heavily subsidised by authoritarian regimes,” especially in vital sectors in telecom and transport.